Economic Sentiment Indicators and Foreign Direct Investment: Empirical Evidence from European Union Countries

By: Cieślik, Andrzej.

Contributor(s): Ghodsi, Mahdi.

Material type: materialTypeLabel

BookSeries: wiiw Working Papers: 203Publisher: Wien : Wiener Institut für Internationale Wirtschaftsvergleiche (wiiw), 2021Description: 42 S., 15 Tables and 1 Figure, 30cm.Subject(s): economic sentiment | factor endowments | foreign direct investment | multinational enterprise | market size | EU Member StatesCountries covered: European Unionwiiw Research Areas: International Trade, Competitiveness and FDIClassification: F21 | F23 Online resources: Click here to access online Summary: This paper studies the role of business sentiment in the decisions of multinational enterprises (MNEs) to undertake foreign direct investment (FDI) across European Union (EU) member states. Based on the knowledge-capital model, the study employs the Pseudo Poisson Maximum Likelihood (PPML) estimator and panel data to examine empirically the determinants of FDI across EU member states during the period 2003-2017. The empirical evidence suggests that better economic sentiment in an EU Member State induces MNEs to undertake FDI in that country, while worse economic sentiment in an EU member state motivates an MNE in that country to invest abroad.

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Item type	Current library	Call number	Status	Date due	Barcode
Paper	WIIW Library	5.700/203 (Browse shelf(Opens below))	Available		1000010005875

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This paper studies the role of business sentiment in the decisions of multinational enterprises (MNEs) to undertake foreign direct investment (FDI) across European Union (EU) member states. Based on the knowledge-capital model, the study employs the Pseudo Poisson Maximum Likelihood (PPML) estimator and panel data to examine empirically the determinants of FDI across EU member states during the period 2003-2017. The empirical evidence suggests that better economic sentiment in an EU Member State induces MNEs to undertake FDI in that country, while worse economic sentiment in an EU member state motivates an MNE in that country to invest abroad.

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